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What Apple must do to stop the iPhone 4 bleeding

Steve Jobs and Apple need to take action, and quickly, to address the iPhone 4's antenna issues.

STORY HIGHLIGHTS

To stem the complaints and bad press over the iPhone 4, Apple needs to take action quickly

Here are what my top five priorities would be if I were in Steve Jobs' shoes

The company should acknowledge the phone's antenna problems are real

Issue free bumpers to address the reception problem, but don't recall the phone

(Mashable) -- It'd be an understatement to say that this has been a terrible week for Apple, and we haven't even reached the halfway point.

On Monday, Consumer Reports dealt a devastating blow to the iPhone 4 when it declined to recommend the device to consumers due to the antenna reception problem.

Consumer Reports concluded from its tests that cell reception is indeed lost if you cover up the small gap between the two metal bands on the bottom left corner (as it's facing you) of the phone. The media quickly picked up the story.

Tuesday wasn't any better for the tech giant. Consumer Reports slammed Apple for not providing a fix to customers at no extra cost. Some have even suggested that a recall was imminent -- an endeavor that would cost the company $1.5 billion.

All of this news resulted in a sharp dive in Apple's stock price, although it has since made a partial recovery. There are even class action lawsuits waiting in the wings.

Apple has a nightmare on its hands, and no software fix will make the problem go away. The issue has taken on a life of its own.

The situation isn't impossible for Apple to recover from, though. However, the company needs to take action, and it needs to do it quick. Here are what my top five priorities would be if I were in Steve Jobs' shoes:

1. Acknowledge that the antenna problem is real

While you can't call the data conclusive, you can say that the data overwhelmingly points to one conclusion: the iPhone has an antenna problem. The iPhone antenna issue has been replicated in countless YouTube videos and by multiple media organizations, including us. Apple's internal documents show that they know the issue is real.

This is almost certainly a hardware issue, and it's time that Apple stopped being coy and just admit that the phone does have an issue with its reception. The current string of denials and half-truths won't have any legs as the pressure mounts and the lawyers come knocking.

The best thing the company can do is issue an open letter on the antenna issue, ideally from Steve Jobs himself. The key to making this go away is transparency.

2. Go into the technical details

Once Apple acknowledges the problem, it needs to give up details, such as the science behind the antenna issue, why the company didn't catch it during testing, and different potential fixes.

Don't spare the public the complicated and scientific issues behind the iPhone's design and how different grips affect reception -- anything less won't appease a critical public.

Apple has promised a software update earlier this month to "fix" the formula used to calculate signal bar strength display, which the company pointed to as the root of the iPhone antenna problem.

While we believe that the software fix was meant to be a decoy to the real hardware issue, the company has already committed to the software update, and it should roll it out as promised. Don't keep trying to point to software as the problem, though: most people are aware that it's not a software bug causing the antenna issue and treating it as such is just demeaning and condescending to iPhone users everywhere.

4. Make the bumpers free

Out of all of my suggestions, this one is the key. Those iPhone bumpers may cost $29.00 in the Apple Store, but in reality the rubber and plastic mold only costs a fraction of that price (possibly around $1 per bumper).

Providing that accessory to customers for free solves the antenna issue, as bare skin has to touch the iPhone 4's metal casing in order to drop signal. It's not an ideal fix, but it's far better than the other option: a recall.

5. No matter what, don't issue an iPhone 4 recall

Some have suggested that Apple should recall the iPhone 4. That isn't a simple affair. In fact, most users would be more annoyed and upset than pleased with the Cuptertino-based company.

Let's play out the scenario. Apple performs a recall of its devices. Millions of people are annoyed as they either have to give up their device or keep a clearly defective one. Apple, already at peak production capacity, would take weeks -- if not months -- to replace the phones. Estimates place the cost of a recall in the billions.

Here's the truth: The iPhone 4 antenna issue isn't a hazardous one. It isn't exploding in people's hands, it isn't cutting anyone's palms randomly, and it isn't suddenly bursting into flames. Those are critical issues that would require a recall.

The antenna issue, while important and a problem that Apple should have found and addressed before the product's launch last month, doesn't rise to that level. Recalls are meant only as a last resort. Do you think Ford is going to recall all of its cars for a faulty radio?

Apple, while it may be feeling the pressure, can't cave to it. There is a balance here. It has to be truthful with what's actually wrong with the iPhone antenna and what is not. It has to keep its emotions in check as it discusses the antenna independent of the iPhone 4's many other amazing features. And finally, the company has to give customers something to solve the issue.

Free bumpers seem like the appropriate middle ground. A recall is over-the-top extreme and hurts rather than helps consumers in the end.